2003: Starting with Foreign Trade

Chapter 781 The Goal of Maintaining Sixth Place and Striving for Fourth

The announcement of the merger between WX and MiTalk caused a huge sensation on the internet, but it was also accompanied by great controversy.

Throughout the National Day holiday, Weibo's trending topics were almost entirely dominated by these two topics, with celebrities taking a backseat.

Teng, Xiaomi's number one hater and the future CEO, posted more than a dozen sarcastic and sarcastic Weibo posts. Zhou Hongyi, who almost challenged Lei Jun to a fight, also joined the sarcastic and sarcastic remarks.

These two leading haters gathered a large number of indignant netizens.

What's funny is that the two of them would interact from time to time, which made them quite popular. Zhou Hongyi defined their merging as 'surrender'.

This statement received support from many netizens.

Tencent, which has always been invincible in the social networking field, has a bad reputation due to too many bad things it did in the past, and consumers do not like this kind of monopolistic company.

"Netizens want someone riding a white horse to appear and challenge Tencent's monopoly, but from an entrepreneur's perspective, what's most beneficial to the company is the most important thing. Let them criticize all they want."

Lei Jun was criticized the most, and Tan Jincheng, who directly facilitated the merger, was no exception, also receiving a lot of criticism.

Although Taobao is also a dominant player, other shopping websites such as JD.com, Orange Shopping, and Dangdang.com also occupy a significant market share. In addition, Jack Ma is good at marketing his image, and Ali's reputation has been much better than Tencent's recently.

Social media and e-commerce have different models. Tencent's moat is too high. Challenging it, even if successful, comes at a huge cost. This is different from the e-commerce environment. In e-commerce, you can do quite well as long as you have a few percentage points of market share and your unique features.

Humans are naturally social animals and like to gather together, which creates an environment in the social sphere where there is only a leader and no second-in-command.

Lei Jun (CEO of Tencent) didn't want to avoid a confrontation with Tencent, but after calculating the costs, it wasn't worthwhile. Just a confrontation with WX would require an investment of at least tens of billions of yuan, not to mention that Tencent also has QQ.

In the more than ten years of development of the domestic Internet, many domestic and foreign companies have wanted to compete with Tencent, but the results have not been satisfactory.

To put it bluntly, the market doesn't need that many social media apps.

"That makes sense. Businesses prioritize profits. Xiaomi's focus is on mobile phone hardware. They can't afford to develop on two fronts at once."

Making a good smartphone requires an investment that is not much less than that required for a car. Everyone says that Xiaomi is an assembly plant, but becoming a top-tier assembly plant is not easy either; it requires a lot of investment.

In the villa's courtyard, Zhang Yong was reporting his work to Tan Jincheng, and they were also talking about the recent hot topic of the merger between WeChat and MiTalk.

Zhang Yong didn't understand how the internet worked, but he admired his boss for being able to facilitate the merger of the two giants, which showed that his boss already had great influence in the capital market.

What can a boss with status, background, and influence bring to a company?
This can be seen from the fact that sales forecasts for the ES6 have been revised time and again.

The initial expectation was only around 300 vehicles, but after the Weilai APP was launched and received a good response, sales steadily increased, so the target was adjusted to 1000 vehicles.

However, with the arrival of the peak sales season of September and October, the sales volume of the Weilai ES6 exceeded 300 units for the first time in September, and reached 1237 units in six months after its launch. Now, it has received an order for 300 units from Xiaomi.

It's almost a certainty that the Weilai ES6 will sell over 2000 units in its first year on the market.

The delivery time has increased from one week initially to three weeks now. In order to control costs, the ES6 adopts an order pre-sale model, and it is time to increase production capacity, otherwise it will violate the initial promise that the delivery time will not exceed three weeks.

The still relatively fragile electric vehicle market cannot withstand the damage of longer delivery times.

"Tell Lao Zhang to increase the production capacity of the ES6. If there is not enough manpower, quickly recruit and train people to start working. It must be delivered to users within three weeks. Also, for the 300 vehicles for Xiaomi, not only must the quality be guaranteed, but the delivery time must also be guaranteed."

"Okay, also, could we try exporting?"

"We can give it a try, maybe next year. We'll start testing it in the European market early next year. Our car can compete with the Model S."

Tesla's latest Model S has been released, priced at $49900, which is roughly 30 RMB, similar to the ES6.

With comparable performance and pricing, and considering that electric vehicles also receive subsidies in Europe and America, the two are direct competitors in the international market.

More than a decade later, with our absolute monopoly in new energy vehicles, a joke circulated that the new energy vehicle project was a conspiracy imposed on us by Europe and the United States.

Our lack of technological advantage in internal combustion engines and the resulting patent blockade forced us to enter the market, but the outcome was unexpected for European and American companies.

Currently, subsidies for electric vehicles in Europe and the United States are not much less than those in China. Taking Tesla in the United States as an example, Model S customers can enjoy state tax exemption, tax refund, sales tax exemption, free parking, crossing commuter lanes and other preferential measures.

These comprehensive preferential policies for electric vehicles are no less effective than simple cash subsidies.

Tesla, founded in 2003, has been able to develop rapidly not only because of CEO Elon Musk's dedication and research into advanced technologies, but also because of the various subsidies provided by the US government for electric vehicles.

Tesla's pricing is clearly aimed at the ES6. With various discounts and subsidies, the Model S can be sold for less than the ES6 in the North American market, just like how the Model S sells for 600,000 to 700,000 yuan in China.

In the North American market, the ES6 is not competitive compared to other models in the same class, but in the European market, they are equal and can be compared.

"Let's start with Northern Europe. For exports, we'll mainly focus on pure electric vehicles. We'll try both the Aion S and the ES6."

Despite their frigid climate, the Nordic countries have a relatively high adoption rate of electric vehicles, thanks in part to strong government promotion and their well-developed charging infrastructure.

Another major reason is that the Nordic countries have an almost pathological obsession with environmental protection, especially Norway and Sweden.

As far as I can remember, Wei Lai sold exceptionally well in Norway in my previous life.

"The Nordic countries are also an option. They have a smaller land area and their major cities are more concentrated, which would reduce our costs."

"Also, Tesla should be entering the Chinese market next year. At that time, we might have to take back the rights to that sports car. We need to negotiate the handover with them."

Unlike the original timeline, Tan Jincheng in this life feels more involved in the new energy vehicle industry. New cars are coming out very quickly, and many companies are joining the industry.

In the previous era, the BYD Qin and Maodou S had no rivals in the same class. Now, the two new models are targeting these two popular models, which has led to changes in the marketing and promotion strategies of both companies.

BYD Qin has invested a lot of promotional resources, and is competing fiercely with Aion S in marketing and publicity, while Tesla's planned entry into China also seems to be happening ahead of schedule.

In addition, other companies have also accelerated the release of new energy vehicles, whether for subsidies or to genuinely develop new energy vehicles, everything seems to be moving at a faster pace.

Based on this, there's a chance that new energy vehicles might experience a small boom in 2014.

When formulating marketing strategies, Weilai can no longer be so conservative. In addition, it doesn't need to be so conservative in terms of sales expectations. Anyway, Weilai hasn't gone public yet, so it doesn't seem to have much of an impact to boast a little.
When a disruptor appears in an industry, everything seems to change.

"By the way, boss, are you still going to the Guangzhou Auto Show this year?"

The reason for this question is that Weilai, which has always been accustomed to launching new cars at the Guangzhou Auto Show, has not made any major moves this year. Only the Tank 300 will be launched, with the specific launch date being April next year.

"I won't go this year. You or Mr. Yu, whoever has time, can go on my behalf."

It's not that we don't value the Tank 300, but there are some scheduling conflicts.

During the most intense period of competition in the new energy vehicle market, the CEOs of major automakers often said that only five to seven brands would be able to exist in the future market, and that an automaker's survival depended on annual sales of one million units.

Regardless of whether their claims are exaggerated, there is no doubt that any industry, as it develops, tends to concentrate on leading companies in its later stages.

Annual sales of 100 million vehicles is a difficult hurdle for domestic brands to overcome. Di Zi mentioned it once, and then was taught a lesson by the market.

It seems that it wasn't until ten years later that the annual sales of the Dizi truly broke through 100 million units.

There are very few domestic brands that can actually achieve annual sales of over one million units. There are many factors involved, and it cannot be solved by just one or two popular models.

To put it bluntly, it's still a matter of insufficient technological strength. Any hot-selling product is built on a foundation of technological strength. Simply expanding production capacity will only result in models whose quality cannot keep up with the market.

Consumers may follow the trend of one or two popular models, but they are unlikely to be fooled again after being fooled once.

A million annual sales volume is still a long way off for Weilai, but Weilai can now aim for an annual sales volume of 500,000 vehicles.

With an annual sales target of 50 vehicles, the current production capacity is insufficient, and Weilai will need to expand its production capacity further.

In recent years, Weilai's main investments have been in technology research and development and industrial layout. There has not been much investment in automobile factories. After some repairs and maintenance, the current annual production capacity is about 30 vehicles.

An annual production capacity of 30 vehicles can only meet the current market demand, and even during peak sales seasons, the production capacity may be insufficient.

For the remaining months of this year, Tan Jincheng's main task is to build the factory and select a suitable location for its expansion. In fact, there is no need to select many locations, as Tan Jincheng already has a preferred one.

With the third quarter over, the total sales volume of the Yuechi series reached 23.05 units. The total sales volume for the whole year should be within 30 units. The newly launched Yuechi A3 performed well, with monthly sales exceeding 5000 units since its launch in April.

Given the current popularity of SUVs, these two best-selling models are very likely to enter a phase of explosive growth next year. In Tan Jincheng's memory, the last legendary car in the previous era seemed to have exploded in popularity starting in 2013. It had the reputation established beforehand, as well as the opportunity of the booming SUV market. Since 2013, there have indeed been more and more SUVs on the streets.

"Next year, we need to raise our sales expectations. It's not necessary to follow the overall growth of the car market. We need to follow the growth rate of SUVs. You need to focus on production in the next three months, and I will do my best to help you solve any problems."

The so-called troubles, besides insufficient factory capacity, are other external disturbances. In the mobile internet era, it's hard to keep a low profile.

So far this year, the overall growth rate of SUV sales is 24%, while the growth rate of sedans is only 6% in the same period. Sales of MPVs, which were hyped up in the previous two years, have even declined.

In addition, sales of crossover passenger vehicles, also known as minivans, have declined.

The contrast is quite obvious.

Weilai has a first-mover advantage and has been deeply involved in the SUV market for several years. In addition, the serious crisis that Japanese cars have experienced this year has made the Changan car smashing incident in September particularly big.

This behavior is unacceptable, but it has indeed caused serious damage to Japanese brands, and many potential buyers of Japanese cars will have to think twice.

We must seize this opportunity in the market.

In the previous era, the legendary car belonged to Great Wall Motors. Sorry, but in this era, Yuechi, which has been deeply involved in the SUV market since its inception, must claim that title. After all, the reputation of being the pride of Chinese products now belongs to Yuechi.

It's worth mentioning that the Haval H6 was released following the original trajectory, and it continued to perform well after its launch, becoming a new flagship model in the Great Wall Haval series. Its average monthly sales throughout the year remained stable at over 10,000 units.

It's a very successful model, but compared to the Yuechi A1, it has lost its original luster.

Whether in terms of exterior design or interior design, the H6 is far inferior to the updated Yuechi A1. It sells well, but that's all it is – it sells well.

In addition, the sleazy Tan Jincheng organized a group of online trolls to subtly post that the design of the H6 was based on the Yuechi A1. Although it did not have a significant impact on sales, it certainly infuriated Boss Wei.

This is truly turning the world upside down.

However, there's nothing we can do. The Yuechi A1 has been on the market for more than three years and has already been updated to its second generation. Its formal research and development can be traced back to 2006, which is much earlier than the H6. Mr. Wei simply can't explain it clearly.

Mr. Wei clearly understood that this was a dirty trick by Weilai Auto. The most direct competitor of the H6 is the Yuechi A1. It would be a miracle if Weilai didn't make any moves.

However, it's true that there's no way to explain it clearly, as the two models do have many similarities.

Tan Jincheng's subtle actions are neither exaggerated nor drastic; they subtly influence consumers' perceptions. The effects may not be immediately apparent, but their power will become apparent years later.

"At the current growth rate, our sales target for next year is expected to exceed 35 vehicles, which is quite a challenge."

"Indeed, achieving this sales volume with only one new car is quite challenging. Whether we can achieve it will directly determine our position this year."

The Tank 300 is positioned as an off-road vehicle priced under 30 yuan, which is very attractive. However, the off-road vehicle market is still a relatively niche market, even smaller than that of pickup trucks.

In 2012, the total sales of pure off-road vehicles were probably less than 10 units. Even if there was growth in 2013, it was unlikely to exceed 20 units, which is roughly the same as the sales volume of pickup trucks.

The Tank 300 only had sales for nine months, so the production capacity it could provide was very limited.

To boost sales, we must tap into the potential of existing models.

However, if they can get through next year's hurdle, then Weilai can firmly establish itself as the fourth largest domestic independent brand, and BJQ will have another "W" added after it.

As for pure domestic brands, Weilai is quite competitive right now, consistently ranking among the top six in annual sales. In fact, many state-owned enterprises, such as JAC and Dongfeng (domestic brands) which are undergoing restructuring, do not have as high sales as Weilai.

Aiming for a top-six finish and striving for a top-four finish is Wei Lai's goal for next year.

As for new energy vehicles, let's be bolder: 5000 vehicles? Or even more?

In October 2012, the internet was abuzz with excitement starting with the merger of WX and MiTalk. This excitement lasted until mid-October, only subsiding after Mo Yan won the Nobel Prize in Literature.

Teng, the number one hater and currently working at OPPO, made sarcastic remarks about Lei Jun for more than a week, but as the hype died down and the Xiaomi 2 continued to be a hit, he quieted down.

That said, it's really interesting how mobile phone manufacturers try to piggyback on each other's popularity these days. You smear me, I smear you. The love-hate relationship between Zhou Hongyi and Lei Jun is ultimately just about getting some publicity for their mobile phone business.

These days, criticizing Xiaomi is like a politically correct thing to do; it's incredibly popular, and even just getting involved in it can bring some exposure to your own products.

The criticism of Tan Jincheng was relatively mild, limited to the first few days after the news broke. After that, not many people dared to criticize him recklessly. While being criticized, a large number of Tan Jincheng's fans automatically defended him.

There are rumors that Mr. Tan is just a middleman, and that he's just an investor who can't run Xiaomi's business.

This is the status of business tycoons. Internet tycoons are often ridiculed by netizens, but business tycoons are rarely treated this way. If Lei Jun had a mobile phone factory, I believe his treatment would be quite different.

Amidst all the commotion, Tan Jincheng has already begun negotiations with the Beicang District government, as Weilai Automobile, constrained by production capacity, urgently needs to expand.

"You want to build your new factory in Chunxiao Automotive Industrial Park? That's a good thing, the district will definitely support it."

The planning of Chunxiao Automobile Industrial Park began in 2008 when Weilai Automobile was established. It must be said that the coastal city's vision for development is indeed quite advanced. The preparatory work, such as demolition and renovation, was carried out for two years.

Construction began in June last year, with the aim of attracting investment and bringing in more automakers and auto parts companies.

The factory buildings were built to high standards, and Tan Jincheng was attracted by the fact that a large number of factories had already been built here, making it very advantageous in terms of time, whether to rent or buy.

In addition, Chunxiao Industrial Park has a very good geographical location, adjacent to Meishan Port, 20 kilometers away from Beicang Port, and about 35 kilometers away from Ningbo city. It is very convenient to go out of the port by sea or land.

The biggest beneficiary of Weilai's soaring sales this year is the Beicang District government, whose infrastructure investment has finally come in handy.

In fact, the Beicang District government also had a gamble involved. Weilai Auto has launched several new models this year, and its most important model, Yuechi A1, has been upgraded to the second generation. The gamble was on a production capacity explosion for Weilai Auto.

Now, they've won their gamble.

In fact, well-known auto parts companies have already moved into the automotive industrial park. Minth Group's $7000 million factory, which it started investing in in 2010, will be officially delivered at the end of this year.

In addition, there are also a number of parts companies of all sizes that have moved in. The nest has been set up and is just waiting for Wei to come and land like a golden phoenix.

"Director Hu, could you please introduce the specific plan? That way, I can plan our production capacity accordingly."

"The first phase of the automobile factory that has been built in our Yuanqu area covers an area of ​​1,000 mu (approximately 67 hectares) with a factory area of ​​about 250,000 square meters. It can be planned to include four major process workshops: stamping, welding, painting, and final assembly, with an annual production capacity of 200,000 vehicles per year."

"Of course, this is only the first phase of the car factory plan. There will be a second and a third phase. If you have any needs, we can adjust the plan according to your production capacity. The overall plan for our park is to extend to 2030."

"If Mr. Tan wants to move in, we can provide the best service. Also, if Mr. Tan has any other needs, he can make a request and we will try our best to meet them."

There's no other way but to get involved. These days, local governments are building factories directly to attract investment projects, all to reduce construction time for businesses and create more opportunities for investment. Insufficient production capacity is already a foregone conclusion.

Chunxiao Industrial Park isn't the only company eyeing Weilai; Meishan, just across the sea, is also eyeing it covetously.

It's a pity that the factory area is a bit small. According to the data obtained by the China Association of Automobile Manufacturers, Weilai's sales this year are almost guaranteed to be above 25 vehicles, and most likely 28 vehicles.

Assuming normal production growth next year, the capacity will be at least 30 vehicles. I thought about the growth rate of Weilai, but I still underestimated the rate at which Weilai's costs increased.

Since Tan Jincheng first announced his intention to build a factory to expand production capacity, he has heard this kind of talk too many times. The first place to approach him was naturally Meishan Island, but the factory there would need to be built by him.

Because a lot of land is in Wei Lai's hands, and there are also plans to build an industrial park for Wei Lai in the capital, Luzhou and even Yicheng, but all of these plans are somewhat rushed.

The best option right now is Chunxiao Industrial Park. Although the first phase of the factory only has a production capacity of 20 vehicles, it can be used directly, which saves Wei a lot of trouble in terms of engineering construction.

In the past, if Tan Jincheng wanted to find a factory in a certain city, he would have to go around asking for connections. Now, for industrial parks that are not of a high level, you have to ask for connections to meet with Tan Jincheng.

"Let's go inside the factory and take a look. Seeing is believing."

According to Tan Jincheng's plan, this time he intends to directly plan two factories: one for new energy vehicles and one for gasoline vehicles, with a combined production capacity of 50 vehicles per year.

However, since Chunxiao Industrial Park is already there, and there are many auto parts companies settling in the surrounding area, it wouldn't hurt to go and take a look.

If it's suitable, I'll buy it and use it first.

"Okay, let's go there now."

The director of Chunxiao Subdistrict Office was very happy, as it seemed that there was a high probability that they could finalize the cooperation agreement with President Tan.

(End of this chapter)